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Share Name | Share Symbol | Market | Type |
---|---|---|---|
United Technologies Corporation | NYSE:UTX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 86.01 | 0 | 01:00:00 |
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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06-0570975
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10 Farm Springs Road, Farmington, Connecticut 06032
(860) 728-7000
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Condensed Consolidated Statement of Operations for the quarters ended March 31, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Item 1.
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Financial Statements
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Net Sales:
|
|
|
|
||||
Product sales
|
$
|
9,637
|
|
|
$
|
9,419
|
|
Service sales
|
4,178
|
|
|
3,938
|
|
||
|
13,815
|
|
|
13,357
|
|
||
Costs and Expenses:
|
|
|
|
||||
Cost of products sold
|
7,263
|
|
|
7,087
|
|
||
Cost of services sold
|
2,814
|
|
|
2,567
|
|
||
Research and development
|
577
|
|
|
541
|
|
||
Selling, general and administrative
|
1,482
|
|
|
1,363
|
|
||
|
12,136
|
|
|
11,558
|
|
||
Other income, net
|
588
|
|
|
146
|
|
||
Operating profit
|
2,267
|
|
|
1,945
|
|
||
Interest expense, net
|
213
|
|
|
223
|
|
||
Income from continuing operations before income taxes
|
2,054
|
|
|
1,722
|
|
||
Income tax expense
|
586
|
|
|
469
|
|
||
Net income from continuing operations
|
1,468
|
|
|
1,253
|
|
||
Less: Noncontrolling interest in subsidiaries' earnings from continuing operations
|
82
|
|
|
81
|
|
||
Income from continuing operations attributable to common shareowners
|
1,386
|
|
|
1,172
|
|
||
Discontinued operations (Note 2):
|
|
|
|
||||
Gain on disposal
|
—
|
|
|
18
|
|
||
Income tax expense
|
—
|
|
|
(7
|
)
|
||
Income from discontinued operations attributable to common shareowners
|
—
|
|
|
11
|
|
||
Net income attributable to common shareowners
|
$
|
1,386
|
|
|
$
|
1,183
|
|
Earnings Per Share of Common Stock - Basic:
|
|
|
|
||||
Income from continuing operations attributable to common shareowners
|
$
|
1.75
|
|
|
$
|
1.42
|
|
Net income attributable to common shareowners
|
$
|
1.75
|
|
|
$
|
1.43
|
|
Earnings Per Share of Common Stock - Diluted:
|
|
|
|
||||
Income from continuing operations attributable to common shareowners
|
$
|
1.73
|
|
|
$
|
1.41
|
|
Net income attributable to common shareowners
|
$
|
1.73
|
|
|
$
|
1.42
|
|
|
|
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|
|
Quarter Ended
March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net income from continuing operations
|
$
|
1,468
|
|
|
$
|
1,253
|
|
Net income from discontinued operations
|
—
|
|
|
11
|
|
||
Net income
|
1,468
|
|
|
1,264
|
|
||
Other comprehensive income (loss), net of tax (expense) benefit:
|
|
|
|
||||
Foreign currency translation adjustments
|
|
|
|
||||
Foreign currency translation adjustments arising during period
|
146
|
|
|
39
|
|
||
Less: Reclassification adjustments for gain on sale of an investment in a foreign entity recognized in Other income, net
|
—
|
|
|
1
|
|
||
|
146
|
|
|
40
|
|
||
Pension and postretirement benefit plans
|
|
|
|
||||
Pension and postretirement benefit plans adjustments during the period
|
1
|
|
|
(25
|
)
|
||
Amortization of actuarial loss, prior service cost and transition obligation
|
131
|
|
|
126
|
|
||
|
132
|
|
|
101
|
|
||
Tax expense
|
(49
|
)
|
|
(38
|
)
|
||
|
83
|
|
|
63
|
|
||
Unrealized (loss) gain on available-for-sale securities
|
|
|
|
||||
Unrealized holding (loss) gain arising during period
|
(32
|
)
|
|
69
|
|
||
Reclassification adjustments for gain included in Other income, net
|
(383
|
)
|
|
(27
|
)
|
||
|
(415
|
)
|
|
42
|
|
||
Tax benefit (expense)
|
158
|
|
|
(19
|
)
|
||
|
(257
|
)
|
|
23
|
|
||
Change in unrealized cash flow hedging
|
|
|
|
||||
Unrealized cash flow hedging gain arising during period
|
64
|
|
|
159
|
|
||
Loss reclassified into Product sales
|
5
|
|
|
62
|
|
||
|
69
|
|
|
221
|
|
||
Tax expense
|
(15
|
)
|
|
(59
|
)
|
||
|
54
|
|
|
162
|
|
||
Other comprehensive income, net of tax
|
26
|
|
|
288
|
|
||
Comprehensive income
|
1,494
|
|
|
1,552
|
|
||
Less: Comprehensive income attributable to noncontrolling interest
|
(107
|
)
|
|
(94
|
)
|
||
Comprehensive income attributable to common shareowners
|
$
|
1,387
|
|
|
$
|
1,458
|
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,156
|
|
|
$
|
7,157
|
|
Accounts receivable, net
|
11,840
|
|
|
11,481
|
|
||
Inventories and contracts in progress, net
|
9,386
|
|
|
8,704
|
|
||
Other assets, current
|
923
|
|
|
1,208
|
|
||
Total Current Assets
|
29,305
|
|
|
28,550
|
|
||
Customer financing assets
|
1,593
|
|
|
1,398
|
|
||
Future income tax benefits
|
1,804
|
|
|
1,809
|
|
||
Fixed assets
|
19,892
|
|
|
19,469
|
|
||
Less: Accumulated depreciation
|
(10,637
|
)
|
|
(10,311
|
)
|
||
Fixed assets, net
|
9,255
|
|
|
9,158
|
|
||
Goodwill
|
27,273
|
|
|
27,059
|
|
||
Intangible assets, net
|
15,780
|
|
|
15,684
|
|
||
Other assets
|
5,363
|
|
|
6,048
|
|
||
Total Assets
|
$
|
90,373
|
|
|
$
|
89,706
|
|
Liabilities and Equity
|
|
|
|
||||
Short-term borrowings
|
$
|
1,200
|
|
|
$
|
601
|
|
Accounts payable
|
7,520
|
|
|
7,483
|
|
||
Accrued liabilities
|
12,522
|
|
|
12,219
|
|
||
Long-term debt currently due
|
2,484
|
|
|
1,603
|
|
||
Total Current Liabilities
|
23,726
|
|
|
21,906
|
|
||
Long-term debt
|
20,898
|
|
|
21,697
|
|
||
Future pension and postretirement benefit obligations
|
5,433
|
|
|
5,612
|
|
||
Other long-term liabilities
|
10,737
|
|
|
11,026
|
|
||
Total Liabilities
|
60,794
|
|
|
60,241
|
|
||
Commitments and contingent liabilities (Note 15)
|
|
|
|
||||
Redeemable noncontrolling interest
|
307
|
|
|
296
|
|
||
Shareowners' Equity:
|
|
|
|
||||
Common Stock
|
17,359
|
|
|
17,285
|
|
||
Treasury Stock
|
(35,080
|
)
|
|
(34,150
|
)
|
||
Retained earnings
|
53,741
|
|
|
52,873
|
|
||
Unearned ESOP shares
|
(93
|
)
|
|
(95
|
)
|
||
Accumulated other comprehensive loss
|
(8,333
|
)
|
|
(8,334
|
)
|
||
Total Shareowners' Equity
|
27,594
|
|
|
27,579
|
|
||
Noncontrolling interest
|
1,678
|
|
|
1,590
|
|
||
Total Equity
|
29,272
|
|
|
29,169
|
|
||
Total Liabilities and Equity
|
$
|
90,373
|
|
|
$
|
89,706
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Operating Activities of Continuing Operations:
|
|
|
|
||||
Net income from continuing operations
|
$
|
1,468
|
|
|
$
|
1,253
|
|
Adjustments to reconcile net income from continuing operations to net cash flows provided by operating activities of continuing operations:
|
|
|
|
||||
Depreciation and amortization
|
512
|
|
|
466
|
|
||
Deferred income tax provision
|
109
|
|
|
145
|
|
||
Stock compensation cost
|
47
|
|
|
48
|
|
||
Change in:
|
|
|
|
||||
Accounts receivable
|
(268
|
)
|
|
(110
|
)
|
||
Inventories and contracts in progress
|
(654
|
)
|
|
(310
|
)
|
||
Other current assets
|
(21
|
)
|
|
(81
|
)
|
||
Accounts payable and accrued liabilities
|
468
|
|
|
(130
|
)
|
||
Global pension contributions
|
(46
|
)
|
|
(75
|
)
|
||
Canadian government settlement
|
(246
|
)
|
|
(237
|
)
|
||
Other operating activities, net
|
(376
|
)
|
|
(171
|
)
|
||
Net cash flows provided by operating activities of continuing operations
|
993
|
|
|
798
|
|
||
Investing Activities of Continuing Operations:
|
|
|
|
||||
Capital expenditures
|
(325
|
)
|
|
(286
|
)
|
||
Investments in businesses
|
(95
|
)
|
|
(79
|
)
|
||
Dispositions of businesses
|
(5
|
)
|
|
16
|
|
||
Proceeds from sale of investments in Watsco, Inc.
|
596
|
|
|
—
|
|
||
(Increase) decrease in customer financing assets, net
|
(147
|
)
|
|
13
|
|
||
Increase in collaboration intangible assets
|
(101
|
)
|
|
(98
|
)
|
||
(Payments) receipts from settlements of derivative contracts
|
(113
|
)
|
|
42
|
|
||
Other investing activities, net
|
51
|
|
|
(101
|
)
|
||
Net cash flows used in investing activities of continuing operations
|
(139
|
)
|
|
(493
|
)
|
||
Financing Activities of Continuing Operations:
|
|
|
|
||||
(Repayment) issuance of long-term debt, net
|
(27
|
)
|
|
2,324
|
|
||
Increase in short-term borrowings, net
|
567
|
|
|
306
|
|
||
Proceeds from Common Stock issued under employee stock plans
|
11
|
|
|
2
|
|
||
Dividends paid on Common Stock
|
(505
|
)
|
|
(509
|
)
|
||
Repurchase of Common Stock
|
(933
|
)
|
|
—
|
|
||
Other financing activities, net
|
(42
|
)
|
|
(93
|
)
|
||
Net cash flows (used in) provided by financing activities of continuing operations
|
(929
|
)
|
|
2,030
|
|
||
Discontinued Operations:
|
|
|
|
||||
Net cash flows used in operating activities of discontinued operations
|
—
|
|
|
(2,227
|
)
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
69
|
|
|
17
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(6
|
)
|
|
125
|
|
||
Cash, cash equivalents and restricted cash, beginning of year
|
7,189
|
|
|
7,120
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
7,183
|
|
|
7,245
|
|
||
Less: Restricted cash, included in Other assets
|
27
|
|
|
30
|
|
||
Cash and cash equivalents, end of period
|
$
|
7,156
|
|
|
$
|
7,215
|
|
(Dollars in millions)
|
Balance as of
January 1, 2017 |
|
Goodwill
Resulting from Business Combinations
|
|
Foreign Currency Translation and Other
|
|
Balance as of
March 31, 2017 |
||||||||
Otis
|
$
|
1,575
|
|
|
$
|
(7
|
)
|
|
$
|
57
|
|
|
$
|
1,625
|
|
UTC Climate, Controls & Security
|
9,487
|
|
|
41
|
|
|
93
|
|
|
9,621
|
|
||||
Pratt & Whitney
|
1,511
|
|
|
—
|
|
|
—
|
|
|
1,511
|
|
||||
UTC Aerospace Systems
|
14,483
|
|
|
—
|
|
|
30
|
|
|
14,513
|
|
||||
Total Segments
|
27,056
|
|
|
34
|
|
|
180
|
|
|
27,270
|
|
||||
Eliminations and other
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total
|
$
|
27,059
|
|
|
$
|
34
|
|
|
$
|
180
|
|
|
$
|
27,273
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
(Dollars in millions)
|
Gross Amount
|
|
Accumulated
Amortization
|
|
Gross Amount
|
|
Accumulated
Amortization
|
||||||||
Amortized:
|
|
|
|
|
|
|
|
||||||||
Service portfolios
|
$
|
2,073
|
|
|
$
|
(1,412
|
)
|
|
$
|
1,995
|
|
|
$
|
(1,344
|
)
|
Patents and trademarks
|
384
|
|
|
(208
|
)
|
|
378
|
|
|
(201
|
)
|
||||
Collaboration intangible assets
|
3,825
|
|
|
(255
|
)
|
|
3,724
|
|
|
(211
|
)
|
||||
Customer relationships and other
|
12,967
|
|
|
(3,640
|
)
|
|
12,798
|
|
|
(3,480
|
)
|
||||
|
19,249
|
|
|
(5,515
|
)
|
|
18,895
|
|
|
(5,236
|
)
|
||||
Unamortized:
|
|
|
|
|
|
|
|
||||||||
Trademarks and other
|
2,046
|
|
|
—
|
|
|
2,025
|
|
|
—
|
|
||||
Total
|
$
|
21,295
|
|
|
$
|
(5,515
|
)
|
|
$
|
20,920
|
|
|
$
|
(5,236
|
)
|
(Dollars in millions)
|
|
Remaining 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||||
Amortization expense
|
|
$
|
623
|
|
|
$
|
855
|
|
|
$
|
868
|
|
|
$
|
848
|
|
|
$
|
817
|
|
|
$
|
805
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions, except per share amounts; shares in millions)
|
2017
|
|
2016
|
||||
Net income attributable to common shareowners:
|
|
|
|
||||
Net income from continuing operations
|
$
|
1,386
|
|
|
$
|
1,172
|
|
Income from discontinued operations
|
—
|
|
|
11
|
|
||
Net income attributable to common shareowners
|
$
|
1,386
|
|
|
$
|
1,183
|
|
Basic weighted average number of shares outstanding
|
793.5
|
|
|
825.0
|
|
||
Stock awards and equity units
|
8.8
|
|
|
6.3
|
|
||
Diluted weighted average number of shares outstanding
|
802.3
|
|
|
831.3
|
|
||
Earnings Per Share of Common Stock - Basic:
|
|
|
|
||||
Net income from continuing operations
|
$
|
1.75
|
|
|
$
|
1.42
|
|
Income from discontinued operations
|
—
|
|
|
0.01
|
|
||
Net income attributable to common shareowners
|
1.75
|
|
|
1.43
|
|
||
Earnings Per Share of Common Stock - Diluted:
|
|
|
|
||||
Net income from continuing operations
|
$
|
1.73
|
|
|
$
|
1.41
|
|
Income from discontinued operations
|
—
|
|
|
0.01
|
|
||
Net income attributable to common shareowners
|
1.73
|
|
|
1.42
|
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
2,154
|
|
|
$
|
2,040
|
|
Work-in-process
|
3,075
|
|
|
2,787
|
|
||
Finished goods
|
3,528
|
|
|
3,305
|
|
||
Contracts in progress
|
9,592
|
|
|
9,395
|
|
||
|
18,349
|
|
|
17,527
|
|
||
Less:
|
|
|
|
||||
Progress payments, secured by lien, on U.S. Government contracts
|
(131
|
)
|
|
(130
|
)
|
||
Billings on contracts in progress
|
(8,832
|
)
|
|
(8,693
|
)
|
||
|
$
|
9,386
|
|
|
$
|
8,704
|
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Commercial paper
|
$
|
1,074
|
|
|
$
|
522
|
|
Other borrowings
|
126
|
|
|
79
|
|
||
Total short-term borrowings
|
$
|
1,200
|
|
|
$
|
601
|
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
1.800% notes due 2017
1
|
$
|
1,500
|
|
|
$
|
1,500
|
|
6.800% notes due 2018
|
99
|
|
|
99
|
|
||
EURIBOR plus 0.800% floating rate notes due 2018 (€750 million principal value)
2
|
811
|
|
|
783
|
|
||
1.778% junior subordinated notes due 2018
|
1,100
|
|
|
1,100
|
|
||
LIBOR plus 0.350% floating rate notes due 2019
3
|
350
|
|
|
350
|
|
||
1.500% notes due 2019
1
|
650
|
|
|
650
|
|
||
8.875% notes due 2019
|
271
|
|
|
271
|
|
||
4.875% notes due 2020
1
|
171
|
|
|
171
|
|
||
4.500% notes due 2020
1
|
1,250
|
|
|
1,250
|
|
||
8.750% notes due 2021
|
250
|
|
|
250
|
|
||
1.950% notes due 2021
1
|
750
|
|
|
750
|
|
||
1.125% notes due 2021 (€950 million principal value)
1
|
1,027
|
|
|
992
|
|
||
3.100% notes due 2022
1
|
2,300
|
|
|
2,300
|
|
||
1.250% notes due 2023 (€750 million principal value)
1
|
811
|
|
|
783
|
|
||
1.875% notes due 2026 (€500 million principal value)
1
|
540
|
|
|
522
|
|
||
2.650% notes due 2026
1
|
1,150
|
|
|
1,150
|
|
||
7.100% notes due 2027
|
141
|
|
|
141
|
|
||
6.700% notes due 2028
|
400
|
|
|
400
|
|
||
7.500% notes due 2029
1
|
550
|
|
|
550
|
|
||
5.400% notes due 2035
1
|
600
|
|
|
600
|
|
||
6.050% notes due 2036
1
|
600
|
|
|
600
|
|
||
6.800% notes due 2036
1
|
134
|
|
|
134
|
|
||
7.000% notes due 2038
|
159
|
|
|
159
|
|
||
6.125% notes due 2038
1
|
1,000
|
|
|
1,000
|
|
||
5.700% notes due 2040
1
|
1,000
|
|
|
1,000
|
|
||
4.500% notes due 2042
1
|
3,500
|
|
|
3,500
|
|
||
4.150% notes due 2045
1
|
850
|
|
|
850
|
|
||
3.750% notes due 2046
1
|
1,100
|
|
|
1,100
|
|
||
Project financing obligations
|
130
|
|
|
155
|
|
||
Other (including capitalized leases)
|
188
|
|
|
189
|
|
||
Total principal long-term debt
|
23,382
|
|
|
23,299
|
|
||
Other (fair market value adjustments and discounts)
|
—
|
|
|
1
|
|
||
Total long-term debt
|
23,382
|
|
|
23,300
|
|
||
Less: current portion
|
2,484
|
|
|
1,603
|
|
||
Long-term debt, net of current portion
|
$
|
20,898
|
|
|
$
|
21,697
|
|
1
|
We may redeem these notes at our option pursuant to their terms.
|
2
|
The three-month EURIBOR rate as of
March 31, 2017
was approximately -0.329%. The notes may be redeemed at our option in whole, but not in part, at any time in the event of certain developments affecting U.S. taxation.
|
3
|
The three-month LIBOR rate as of
March 31, 2017
was approximately 1.150%.
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Defined benefit plans
|
$
|
46
|
|
|
$
|
75
|
|
Defined contribution plans
|
90
|
|
|
78
|
|
|
Pension Benefits
Quarter Ended March 31,
|
|
Other Postretirement Benefits
Quarter Ended March 31,
|
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
93
|
|
|
$
|
94
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
278
|
|
|
302
|
|
|
7
|
|
|
8
|
|
||||
Expected return on plan assets
|
(540
|
)
|
|
(556
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(9
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial net loss (gain)
|
143
|
|
|
135
|
|
|
(3
|
)
|
|
(1
|
)
|
||||
Net settlement and curtailment loss
|
1
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Total net periodic benefit (income) cost
|
$
|
(34
|
)
|
|
$
|
(21
|
)
|
|
$
|
5
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
||
Otis
|
$
|
5
|
|
UTC Climate, Controls & Security
|
23
|
|
|
UTC Aerospace Systems
|
23
|
|
|
Eliminations and other
|
1
|
|
|
Total
|
$
|
52
|
|
(Dollars in millions)
|
Severance
|
|
Facility Exit, Lease Termination and Other Costs
|
|
Total
|
||||||
Net pre-tax restructuring costs
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
24
|
|
Utilization and foreign exchange
|
(5
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|||
Balance at March 31, 2017
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
(Dollars in millions)
|
Expected
Costs
|
|
Costs Incurred Quarter Ended
March 31, 2017
|
|
Remaining Costs at
March 31, 2017
|
||||||
Otis
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
UTC Climate, Controls & Security
|
21
|
|
|
(12
|
)
|
|
9
|
|
|||
UTC Aerospace Systems
|
15
|
|
|
(9
|
)
|
|
6
|
|
|||
Eliminations and other
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Total
|
$
|
42
|
|
|
$
|
(24
|
)
|
|
$
|
18
|
|
(Dollars in millions)
|
Severance
|
|
Facility Exit,
Lease
Termination and
Other Costs
|
|
Total
|
||||||
Restructuring accruals at December 31, 2016
|
$
|
63
|
|
|
$
|
46
|
|
|
$
|
109
|
|
Net pre-tax restructuring costs
|
15
|
|
|
7
|
|
|
22
|
|
|||
Utilization and foreign exchange
|
(22
|
)
|
|
(6
|
)
|
|
(28
|
)
|
|||
Balance at March 31, 2017
|
$
|
56
|
|
|
$
|
47
|
|
|
$
|
103
|
|
(Dollars in millions)
|
Expected
Costs
|
|
Costs Incurred in 2016
|
|
Costs Incurred Quarter Ended
March 31, 2017
|
|
Remaining Costs at
March 31, 2017
|
||||||||
Otis
|
$
|
58
|
|
|
$
|
(48
|
)
|
|
$
|
(3
|
)
|
|
$
|
7
|
|
UTC Climate, Controls & Security
|
85
|
|
|
(45
|
)
|
|
(6
|
)
|
|
34
|
|
||||
Pratt & Whitney
|
118
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
||||
UTC Aerospace Systems
|
85
|
|
|
(31
|
)
|
|
(13
|
)
|
|
41
|
|
||||
Total
|
$
|
346
|
|
|
$
|
(242
|
)
|
|
$
|
(22
|
)
|
|
$
|
82
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
Derivatives designated as hedging instruments
|
$
|
22
|
|
|
$
|
15
|
|
|
$
|
128
|
|
|
$
|
196
|
|
Derivatives not designated as hedging instruments
|
84
|
|
|
155
|
|
|
113
|
|
|
158
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Gain recorded in Accumulated other comprehensive loss
|
$
|
64
|
|
|
$
|
159
|
|
Loss reclassified from Accumulated other comprehensive loss into Product sales (effective portion)
|
5
|
|
|
62
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Gain recognized in Other income, net
|
$
|
12
|
|
|
$
|
15
|
|
December 31, 2016 (Dollars in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
$
|
987
|
|
|
$
|
987
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative assets
|
170
|
|
|
—
|
|
|
170
|
|
|
—
|
|
||||
Derivative liabilities
|
(354
|
)
|
|
—
|
|
|
(354
|
)
|
|
—
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
(Dollars in millions)
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Long-term receivables
|
$
|
143
|
|
|
$
|
134
|
|
|
$
|
127
|
|
|
$
|
121
|
|
Customer financing notes receivable
|
450
|
|
|
428
|
|
|
437
|
|
|
420
|
|
||||
Short-term borrowings
|
(1,200
|
)
|
|
(1,200
|
)
|
|
(600
|
)
|
|
(600
|
)
|
||||
Long-term debt (excluding capitalized leases)
|
(23,361
|
)
|
|
(25,154
|
)
|
|
(23,280
|
)
|
|
(25,110
|
)
|
||||
Long-term liabilities
|
(433
|
)
|
|
(407
|
)
|
|
(457
|
)
|
|
(427
|
)
|
(Dollars in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Long-term receivables
|
$
|
134
|
|
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
—
|
|
Customer financing notes receivable
|
428
|
|
|
—
|
|
|
428
|
|
|
—
|
|
||||
Short-term borrowings
|
(1,200
|
)
|
|
—
|
|
|
(1,074
|
)
|
|
(126
|
)
|
||||
Long-term debt (excluding capitalized leases)
|
(25,154
|
)
|
|
—
|
|
|
(24,975
|
)
|
|
(179
|
)
|
||||
Long-term liabilities
|
(407
|
)
|
|
—
|
|
|
(407
|
)
|
|
—
|
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Long-term trade accounts receivable
|
$
|
855
|
|
|
$
|
926
|
|
Notes and leases receivable
|
446
|
|
|
430
|
|
||
Total long-term receivables
|
$
|
1,301
|
|
|
$
|
1,356
|
|
|
Quarter Ended March 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
(Dollars in millions)
|
Share-owners'
Equity
|
|
Non-controlling Interest
|
|
Total
Equity
|
|
Share-owners'
Equity |
|
Non-controlling Interest
|
|
Total
Equity
|
||||||||||||
Equity, beginning of period
|
$
|
27,579
|
|
|
$
|
1,590
|
|
|
$
|
29,169
|
|
|
$
|
27,358
|
|
|
$
|
1,486
|
|
|
$
|
28,844
|
|
Comprehensive income for the period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
1,386
|
|
|
82
|
|
|
1,468
|
|
|
1,183
|
|
|
81
|
|
|
1,264
|
|
||||||
Total other comprehensive (loss) income
|
1
|
|
|
25
|
|
|
26
|
|
|
275
|
|
|
13
|
|
|
288
|
|
||||||
Total comprehensive income for the period
|
1,387
|
|
|
107
|
|
|
1,494
|
|
|
1,458
|
|
|
94
|
|
|
1,552
|
|
||||||
Common Stock issued under employee plans
|
79
|
|
|
|
|
79
|
|
|
59
|
|
|
|
|
59
|
|
||||||||
Common Stock repurchased
|
(933
|
)
|
|
|
|
(933
|
)
|
|
—
|
|
|
|
|
—
|
|
||||||||
Dividends on Common Stock
|
(505
|
)
|
|
|
|
(505
|
)
|
|
(509
|
)
|
|
|
|
(509
|
)
|
||||||||
Dividends on ESOP Common Stock
|
(18
|
)
|
|
|
|
(18
|
)
|
|
(18
|
)
|
|
|
|
(18
|
)
|
||||||||
Dividends attributable to noncontrolling interest
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
|
|
|
(51
|
)
|
|
(51
|
)
|
||||||
Purchase of subsidiary shares from noncontrolling interest, net
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
34
|
|
|
34
|
|
|||||||
Other
|
5
|
|
|
(13
|
)
|
|
(8
|
)
|
|
5
|
|
|
(12
|
)
|
|
(7
|
)
|
||||||
Equity, end of period
|
$
|
27,594
|
|
|
$
|
1,678
|
|
|
$
|
29,272
|
|
|
$
|
28,353
|
|
|
$
|
1,550
|
|
|
$
|
29,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
Foreign
Currency
Translation
|
|
Defined
Benefit
Pension and
Post-
retirement
Plans
|
|
Unrealized Gains
(Losses) on
Available-for-Sale
Securities
|
|
Unrealized
Hedging
(Losses)
Gains
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
||||||||||
Quarter Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
(3,480
|
)
|
|
$
|
(5,045
|
)
|
|
$
|
353
|
|
|
$
|
(162
|
)
|
|
$
|
(8,334
|
)
|
Other comprehensive (loss) income before
reclassifications, net |
121
|
|
|
—
|
|
|
(21
|
)
|
|
50
|
|
|
150
|
|
|||||
Amounts reclassified, pre-tax
|
—
|
|
|
131
|
|
|
(383
|
)
|
|
5
|
|
|
(247
|
)
|
|||||
Tax (benefit) expense reclassified
|
—
|
|
|
(48
|
)
|
|
147
|
|
|
(1
|
)
|
|
98
|
|
|||||
Balance at March 31, 2017
|
$
|
(3,359
|
)
|
|
$
|
(4,962
|
)
|
|
$
|
96
|
|
|
$
|
(108
|
)
|
|
$
|
(8,333
|
)
|
(Dollars in millions)
|
Foreign
Currency
Translation
|
|
Defined
Benefit
Pension and
Post-
retirement
Plans
|
|
Unrealized Gains
(Losses) on
Available-for-Sale
Securities
|
|
Unrealized
Hedging
(Losses)
Gains
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
||||||||||
Quarter Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2015
|
$
|
(2,438
|
)
|
|
$
|
(5,135
|
)
|
|
$
|
293
|
|
|
$
|
(339
|
)
|
|
$
|
(7,619
|
)
|
Other comprehensive income (loss) before reclassifications, net
|
26
|
|
|
(17
|
)
|
|
38
|
|
|
117
|
|
|
164
|
|
|||||
Amounts reclassified, pre-tax
|
1
|
|
|
126
|
|
|
(27
|
)
|
|
62
|
|
|
162
|
|
|||||
Tax (benefit) expense reclassified
|
—
|
|
|
(46
|
)
|
|
12
|
|
|
(17
|
)
|
|
(51
|
)
|
|||||
Balance at March 31, 2016
|
$
|
(2,411
|
)
|
|
$
|
(5,072
|
)
|
|
$
|
316
|
|
|
$
|
(177
|
)
|
|
$
|
(7,344
|
)
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Current assets
|
$
|
3,314
|
|
|
$
|
2,722
|
|
Noncurrent assets
|
1,319
|
|
|
1,334
|
|
||
Total assets
|
$
|
4,633
|
|
|
$
|
4,056
|
|
|
|
|
|
||||
Current liabilities
|
$
|
2,883
|
|
|
$
|
2,422
|
|
Noncurrent liabilities
|
1,663
|
|
|
1,636
|
|
||
Total liabilities
|
$
|
4,546
|
|
|
$
|
4,058
|
|
(Dollars in millions)
|
|
2017
|
|
2016
|
||||
Balance as of January 1
|
|
$
|
1,199
|
|
|
$
|
1,212
|
|
Warranties and performance guarantees issued
|
|
78
|
|
|
76
|
|
||
Settlements made
|
|
(56
|
)
|
|
(62
|
)
|
||
Other
|
|
1
|
|
|
10
|
|
||
Balance as of March 31
|
|
$
|
1,222
|
|
|
$
|
1,236
|
|
|
Net Sales
|
|
Operating Profits
|
|
Operating Profit Margins
|
||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
Otis
|
$
|
2,804
|
|
|
$
|
2,715
|
|
|
$
|
452
|
|
|
$
|
466
|
|
|
16.1
|
%
|
|
17.2
|
%
|
UTC Climate, Controls & Security
|
3,892
|
|
|
3,728
|
|
|
963
|
|
|
606
|
|
|
24.7
|
%
|
|
16.3
|
%
|
||||
Pratt & Whitney
|
3,758
|
|
|
3,588
|
|
|
393
|
|
|
410
|
|
|
10.5
|
%
|
|
11.4
|
%
|
||||
UTC Aerospace Systems
|
3,611
|
|
|
3,505
|
|
|
576
|
|
|
538
|
|
|
16.0
|
%
|
|
15.3
|
%
|
||||
Total segments
|
14,065
|
|
|
13,536
|
|
|
2,384
|
|
|
2,020
|
|
|
16.9
|
%
|
|
14.9
|
%
|
||||
Eliminations and other
|
(250
|
)
|
|
(179
|
)
|
|
(13
|
)
|
|
16
|
|
|
|
|
|
||||||
General corporate expenses
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(91
|
)
|
|
|
|
|
||||||
Consolidated
|
$
|
13,815
|
|
|
$
|
13,357
|
|
|
$
|
2,267
|
|
|
$
|
1,945
|
|
|
16.4
|
%
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
- delays the effective date of ASU 2014-09 by one year.
|
•
|
ASU 2016-08,
Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
- clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.
|
•
|
ASU 2016-10,
Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing
- clarifies the guidance surrounding licensing arrangements and the identification of performance obligations.
|
•
|
ASU 2016-12,
Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients
- addresses implementation issues raised by stakeholders concerning collectability, noncash consideration, presentation of sales tax, and transition.
|
•
|
ASU 2016-20,
Revenue from Contracts with Customers (Topic 606), Technical Corrections and Improvements
- addresses loan guarantee fees, impairment testing of contract costs, provisions for losses on certain contracts, and various disclosures.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net Sales
|
$
|
13,815
|
|
|
$
|
13,357
|
|
|
Quarter Ended March 31, 2017
|
|
Organic change
|
3
|
%
|
Foreign currency translation
|
(1
|
)%
|
Acquisitions and divestitures, net
|
1
|
%
|
Total % Change
|
3
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Cost of products sold
|
$
|
7,263
|
|
|
$
|
7,087
|
|
Percentage of product sales
|
75.4
|
%
|
|
75.2
|
%
|
||
Cost of services sold
|
$
|
2,814
|
|
|
$
|
2,567
|
|
Percentage of service sales
|
67.4
|
%
|
|
65.2
|
%
|
||
Total cost of products and services sold
|
$
|
10,077
|
|
|
$
|
9,654
|
|
|
Quarter Ended March 31, 2017
|
|
Organic change
|
4
|
%
|
Foreign currency translation
|
(1
|
)%
|
Acquisitions and divestitures, net
|
1
|
%
|
Total % Change
|
4
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Gross margin
|
$
|
3,738
|
|
|
$
|
3,703
|
|
Percentage of net sales
|
27.1
|
%
|
|
27.7
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Company-funded
|
$
|
577
|
|
|
$
|
541
|
|
Percentage of net sales
|
4.2
|
%
|
|
4.1
|
%
|
||
Customer-funded
|
$
|
332
|
|
|
$
|
356
|
|
Percentage of net sales
|
2.4
|
%
|
|
2.7
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Selling, general and administrative expenses
|
$
|
1,482
|
|
|
$
|
1,363
|
|
Percentage of net sales
|
10.7
|
%
|
|
10.2
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Other income, net
|
$
|
588
|
|
|
$
|
146
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Interest expense
|
$
|
236
|
|
|
$
|
241
|
|
Interest income
|
(23
|
)
|
|
(18
|
)
|
||
Interest expense, net
|
$
|
213
|
|
|
$
|
223
|
|
Average interest expense rate
|
3.5
|
%
|
|
4.2
|
%
|
|
Quarter Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Effective tax rate
|
28.5
|
%
|
|
27.2
|
%
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Net income from continuing operations attributable to common shareowners
|
$
|
1,386
|
|
|
$
|
1,172
|
|
Diluted earnings per share from continuing operations
|
$
|
1.73
|
|
|
$
|
1.41
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Net income from discontinued operations attributable to common shareowners
|
$
|
—
|
|
|
$
|
11
|
|
Diluted earnings per share from discontinued operations
|
$
|
—
|
|
|
$
|
0.01
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Restructuring costs
|
$
|
52
|
|
|
$
|
62
|
|
Operating Profit Margins
|
16.1
|
%
|
|
17.2
|
%
|
|
|
|
24.7
|
%
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change
|
||||||||||||
|
Organic /
Operational
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Restructuring
Costs
|
|
Other
|
||||
Net Sales
|
3
|
%
|
|
(1
|
)%
|
|
—
|
|
—
|
|
|
1
|
%
|
Cost of Sales
|
5
|
%
|
|
(1
|
)%
|
|
—
|
|
—
|
|
|
—
|
|
Operating Profits
|
(5
|
)%
|
|
(1
|
)%
|
|
—
|
|
2
|
%
|
|
1
|
%
|
•
|
unfavorable price and mix (10%), primarily driven by pricing pressure in China
|
•
|
higher selling, general and administrative expenses (4%), driven by higher labor and information technology costs
|
•
|
higher research and development spending (2%), net of
|
•
|
profit contribution from the higher sales volumes noted above (5%)
|
•
|
and favorable productivity (4%)
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change
|
|||||||||||||
|
Organic /
Operational
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Restructuring
Costs
|
|
Other
|
|||||
Net Sales
|
2
|
%
|
|
(2
|
)%
|
|
4
|
%
|
|
—
|
|
|
—
|
|
Cost of Sales
|
3
|
%
|
|
(2
|
)%
|
|
5
|
%
|
|
—
|
|
|
—
|
|
Operating Profits
|
(5
|
)%
|
|
(2
|
)%
|
|
2
|
%
|
|
1
|
%
|
|
63
|
%
|
•
|
an unfavorable contract adjustment related to a large commercial project (4%)
|
•
|
unfavorable mix and pricing partially offset by the profit contribution from the organic sales growth noted above (net 2%) driven by margin pressure from lower transport refrigeration sales and unfavorable mix within fire and security and commercial refrigeration, net of
|
•
|
the beneficial impact from productivity and restructuring savings (combined 1%)
|
|
|
|
|
|
|
|
|
|
|
|
Pratt & Whitney
|
|
UTC Aerospace Systems
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||
Net Sales
|
$
|
3,758
|
|
|
$
|
3,588
|
|
|
5
|
%
|
|
$
|
3,611
|
|
|
$
|
3,505
|
|
|
3
|
%
|
Cost of Sales
|
2,961
|
|
|
2,795
|
|
|
6
|
%
|
|
2,641
|
|
|
2,571
|
|
|
3
|
%
|
||||
|
797
|
|
|
793
|
|
|
1
|
%
|
|
970
|
|
|
934
|
|
|
4
|
%
|
||||
Operating Expenses & Other
|
404
|
|
|
383
|
|
|
5
|
%
|
|
394
|
|
|
396
|
|
|
(1
|
)%
|
||||
Operating Profits
|
$
|
393
|
|
|
$
|
410
|
|
|
(4
|
)%
|
|
$
|
576
|
|
|
$
|
538
|
|
|
7
|
%
|
Operating Profit Margins
|
10.5
|
%
|
|
11.4
|
%
|
|
|
|
16.0
|
%
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change
|
|||||||||||
|
Organic /
Operational
|
|
FX
Translation*
|
|
Acquisitions /
Divestitures, net
|
|
Restructuring
Costs
|
|
Other
|
|||
Net Sales
|
4
|
%
|
|
1
|
%
|
|
—
|
|
—
|
|
|
—
|
Cost of Sales
|
6
|
%
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Operating Profits
|
(15
|
)%
|
|
10
|
%
|
|
—
|
|
1
|
%
|
|
—
|
•
|
unfavorable year-over-year contract settlements (13%)
|
•
|
lower profit contribution from commercial engines at Pratt & Whitney Canada (8%) driven by the volume decrease noted above
|
•
|
higher negative engine margin (6%)
|
•
|
lower profit contribution from military engines (4%) driven by lower sales
|
•
|
higher profit contribution from the commercial aftermarket sales increase noted above (13%)
|
•
|
profit contribution from higher military development revenues (3%)
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change
|
||||||||||||
|
Organic /
Operational
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Restructuring
Costs
|
|
Other
|
||||
Net Sales
|
5
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
—
|
|
|
—
|
Cost of Sales
|
4
|
%
|
|
—
|
|
|
(1
|
)%
|
|
—
|
|
|
—
|
Operating Profits
|
7
|
%
|
|
2
|
%
|
|
—
|
|
|
(2
|
)%
|
|
—
|
•
|
higher commercial aerospace profit contribution (14%) driven by the commercial aftermarket sales growth noted above, partially offset by adverse commercial aerospace OEM mix, net of
|
•
|
higher selling, general and administrative expenses (4%)
|
•
|
higher research and development costs (3%)
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
Operating Profits
|
||||||||||||
|
Quarter Ended March 31,
|
|
Quarter Ended March 31,
|
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Eliminations and other
|
$
|
(250
|
)
|
|
$
|
(179
|
)
|
|
$
|
(13
|
)
|
|
$
|
16
|
|
General corporate expenses
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
March 31, 2017
|
|
December 31,
2016 |
|
March 31,
2016 |
||||||
Cash and cash equivalents
|
|
$
|
7,156
|
|
|
$
|
7,157
|
|
|
$
|
7,215
|
|
Total debt
|
|
24,582
|
|
|
23,901
|
|
|
23,051
|
|
|||
Net debt (total debt less cash and cash equivalents)
|
|
17,426
|
|
|
16,744
|
|
|
15,836
|
|
|||
Total equity
|
|
29,272
|
|
|
29,169
|
|
|
29,903
|
|
|||
Total capitalization (debt plus equity)
|
|
53,854
|
|
|
53,070
|
|
|
52,954
|
|
|||
Net capitalization (debt plus equity less cash and cash equivalents)
|
|
46,698
|
|
|
45,913
|
|
|
45,739
|
|
Debt to total capitalization
|
|
46
|
%
|
|
45
|
%
|
|
44
|
%
|
|
Net debt to net capitalization
|
|
37
|
%
|
|
36
|
%
|
|
35
|
%
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net cash flows provided by operating activities of continuing operations
|
$
|
993
|
|
|
$
|
798
|
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net cash flows used in investing activities of continuing operations
|
$
|
(139
|
)
|
|
$
|
(493
|
)
|
|
Quarter Ended March 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net cash flows (used in) provided by financing activities of continuing operations
|
$
|
(929
|
)
|
|
$
|
2,030
|
|
(Dollars in millions)
|
Quarter Ended March 31, 2016
|
||
Net cash flows used in discontinued operations
|
$
|
(2,227
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
•
|
the effect of economic conditions in the industries and markets in which we operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters and the financial condition of our customers and suppliers;
|
•
|
challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services;
|
•
|
future levels of indebtedness and capital spending and research and development spending;
|
•
|
future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure;
|
•
|
the timing and scope of future repurchases of our common stoc
k,
which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash;
|
•
|
delays and disruption in delivery of materials and services from suppliers;
|
•
|
company and customer-directed cost reduction efforts and restructuring costs and savings and other consequences thereof;
|
•
|
the scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired businesses into our existing businesses and realization of synergies and opportunities for growth and innovation;
|
•
|
new business opportunities;
|
•
|
our ability to realize the intended benefits of organizational changes;
|
•
|
the anticipated benefits of diversification and balance of operations across product lines, regions and industries;
|
•
|
the outcome of legal proceedings, investigations and other contingencies;
|
•
|
pension plan assumptions and future contributions;
|
•
|
the impact of the negotiation of collective bargaining agreements and labor disputes;
|
•
|
the effect of changes in political conditions in the U.S. and other countries in which we operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; and
|
•
|
the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we operate.
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
2017
|
|
Total Number of Shares Purchased
(000's)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
(000's) |
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(dollars in millions)
|
||||||
January 1 - January 31
|
|
3,118
|
|
|
$
|
110.43
|
|
|
3,118
|
|
|
$
|
3,402
|
|
February 1 - February 28
|
|
4,851
|
|
|
111.71
|
|
|
4,851
|
|
|
$
|
2,860
|
|
|
March 1 - March 31
|
|
421
|
|
|
112.28
|
|
|
421
|
|
|
$
|
2,813
|
|
|
Total
|
|
8,390
|
|
|
$
|
111.26
|
|
|
8,390
|
|
|
|
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
12
|
|
Statement re: computation of ratio of earnings to fixed charges.*
|
|
|
|
15
|
|
Letter re: unaudited interim financial information.*
|
|
|
|
31
|
|
Rule 13a-14(a)/15d-14(a) Certifications.*
|
|
|
|
32
|
|
Section 1350 Certifications.*
|
|
|
|
101.INS
|
|
XBRL Instance Document.*
(File name: utx-20170331.xml)
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.*
(File name: utx-20170331.xsd)
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
(File name: utx-20170331_cal.xml)
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.*
(File name: utx-20170331_def.xml)
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.*
(File name: utx-20170331_lab.xml)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
(File name: utx-20170310_pre.xml)
|
*
|
Submitted electronically herewith.
|
|
|
UNITED TECHNOLOGIES CORPORATION
(Registrant)
|
|
|
|
|
|
Dated:
|
April 28, 2017
|
by:
|
/s/ A
KHIL
J
OHRI
|
|
|
|
Akhil Johri
|
|
|
|
Executive Vice President & Chief Financial Officer
|
|
|
|
|
|
|
|
(on behalf of the Registrant and as the Registrant's Principal Financial Officer)
|
|
|
|
|
Dated:
|
April 28, 2017
|
by:
|
/s/ R
OBERT
J. B
AILEY
|
|
|
|
Robert J. Bailey
|
|
|
|
Corporate Vice President, Controller
|
|
|
|
|
|
|
|
(on behalf of the Registrant and as the Registrant's Principal Accounting Officer)
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
12
|
|
Statement re: computation of ratio of earnings to fixed charges.*
|
|
|
|
15
|
|
Letter re: unaudited interim financial information.*
|
|
|
|
31
|
|
Rule 13a-14(a)/15d-14(a) Certifications.*
|
|
|
|
32
|
|
Section 1350 Certifications.*
|
|
|
|
101.INS
|
|
XBRL Instance Document.*
(File name: utx-20170331.xml)
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.*
(File name: utx-20170331.xsd)
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
(File name: utx-20170331_cal.xml)
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.*
(File name: utx-20170331_def.xml)
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.*
(File name: utx-20170331_lab.xml)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
(File name: utx-20170331_pre.xml)
|
*
|
Submitted electronically herewith.
|
1 Year United Technologies Chart |
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